n-16-50.pdf

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Updated Static Mortality Tables for Defined Benefit Pension Plans for 2017

Notice 2016-50

PURPOSE

This notice provides updated static mortality tables to be used for defined
benefit pension plans under § 430(h)(3)(A) of the Internal Revenue Code (Code)
and § 303(h)(3)(A) of the Employee Retirement Income Security Act of 1974,
Pub. L. No. 93-406, as amended (ERISA). These updated tables, which are
being issued using the methodology in the existing final regulations under
§ 430(h)(3)(A), apply for purposes of calculating the funding target and other
items for valuation dates occurring during calendar year 2017.

This notice also includes a modified unisex version of the mortality tables
for use in determining minimum present value under § 417(e)(3) of the Code and
§ 205(g)(3) of ERISA for distributions with annuity starting dates that occur during
stability periods beginning in the 2017 calendar year.

BACKGROUND

Section 412 of the Code provides minimum funding requirements that
generally apply for defined benefit plans. Section 412(a)(2) provides that § 430
specifies the minimum funding requirements that generally apply to defined
benefit plans that are not multiemployer plans. Section 430(a) defines the
minimum required contribution for such a plan by reference to the plan’s funding
target for the plan year.

Section 430(h)(3) provides rules regarding the mortality tables to be used
under § 430. Under § 430(h)(3)(A), except as provided in § 430(h)(3)(C) or (D),
the Secretary is to prescribe by regulation mortality tables to be used in
determining any present value or making any computation under § 430. Those
tables are to be based on the actual experience of pension plans and projected
trends in that experience. Section 430(h)(3)(B) provides that periodically (at least
every 10 years) these mortality tables shall be revised to reflect the actual
experience of pension plans and projected trends in that experience.

Section 430(h)(3)(C) provides that, upon request by a plan sponsor and
approval by the Secretary, substitute mortality tables that meet the applicable
requirements may be used in lieu of the standard mortality tables provided under
§ 430(h)(3)(A). Section 430(h)(3)(D) provides for the use of separate mortality
tables with respect to certain individuals who are entitled to benefits on account
of disability, with separate tables for those whose disabilities occurred in plan
years beginning before January 1, 1995, and those whose disabilities occurred in
plan years beginning after December 31, 1994. These separate mortality tables
are permitted to be used with respect to disabled individuals in lieu of the

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generally applicable mortality tables provided pursuant to § 430(h)(3)(A) or the
substitute mortality tables under § 430(h)(3)(C).

Mortality Tables for Purposes of § 430

Section 1.430(h)(3)-1 of the regulations provides for mortality tables,
based on the tables contained in the RP-2000 Mortality Tables Report,
1
adjusted
for mortality improvement using Projection Scale AA as recommended in that
report. Section 1.430(h)(3)-1 generally requires the use of separate tables for
nonannuitant and annuitant periods for large plans (those with over 500
participants as of the valuation date). Sponsors of small plans (those with 500 or
fewer participants as of the valuation date) are permitted to use combined tables
that apply the same mortality rates to both annuitants and nonannuitants.

Section 1.430(h)(3)-1 describes the methodology that the IRS will use to
establish mortality tables as provided under § 430(h)(3)(A). The mortality tables
set forth in § 1.430(h)(3)-1 are based on expected mortality as of 2000 and
reflect the impact of expected improvements in mortality. The regulations permit
plan sponsors to apply the projection of mortality improvement in either of two
ways: through use of static tables that are updated annually to reflect expected
improvements in mortality, or through use of generational tables. The regulations
include static mortality tables for use in actuarial valuations as of valuation dates
occurring in 2008 and provide that the mortality tables for valuation dates
occurring in future years are to be provided in the Internal Revenue Bulletin.
Notice 2008-85, 2008-42 IRB 905, sets forth the static mortality tables that apply
under § 430(h)(3)(A) for valuation dates during 2009 through 2013. Notice 2013-
49, 2013-32 IRB 127, provides static mortality tables for valuation dates during
2014 and 2015. Notice 2015-53, 2015-33 IRB 190, provides static mortality
tables for valuation dates during 2016.

Notice 2015-53 stated that the Treasury Department and the IRS expect
to issue proposed regulations revising the base mortality rates and projection
factors in § 1.430(h)(3)-1 and that the new regulations would not apply until 2017.
The Treasury Department and the IRS still expect to issue proposed regulations
revising the base mortality rates and projection factors in § 1.430(h)(3)-1.
However, in order to give sufficient time for notice and comment on the proposed
regulations, the Treasury Department and the IRS expect that the final
regulations will apply beginning in 2018.

As noted in Notice 2015-53, after regulations implementing new mortality
tables are finalized, as additional data regarding mortality improvement for more
recent years becomes available, the Treasury Department and IRS expect to

1
The RP-2000 Mortality Tables Report was released by the Society of Actuaries in July 2000 and
updated in May 2001. Society of Actuaries, RP-2000 Mortality Tables Report, at
www.soa.org/Research/Experience-Study/Pension/research-rp-2000-mortality-tables.aspx.

3
regularly review trends in mortality improvement and will update the projection of
mortality improvement as necessary.

Application of These Tables for Other Funding Rules

Section 1.431(c)(6)-1 provides that the same mortality assumptions that
apply for purposes of § 430(h)(3)(A) and § 1.430(h)(3)-1(a)(2) are used to
determine a multiemployer plan’s current liability for purposes of applying the full-
funding rules of § 431(c)(6). For this purpose, a multiemployer plan is permitted
to apply either the annually-adjusted static mortality tables or the generational
mortality tables.

Section 433 provides the minimum funding standards for CSEC plans,
which are described in section 414(y). Section 433(h)(3)(B)(i) provides that the
Secretary may by regulation prescribe mortality tables to be used in determining
current liability for purposes of § 433(c)(7)(C). The Treasury Department and the
IRS expect to issue regulations prescribing that the mortality tables described in
§ 430(h)(3)(A) are to be used to determine current liability under § 433(c)(7)(C).

Application of Mortality Tables for Minimum Present Value Requirements
under § 417(e)(3)

Section 417(e)(3) generally provides that the present value of certain
benefits under a qualified pension plan (including single-sum distributions)
cannot be less than the present value of the accrued benefit using applicable
interest rates and the applicable mortality table. Under § 1.417(e)-1(d), these
rules must also be used to compute the present value of a plan benefit for
purposes of determining whether consent for a distribution is required under
§ 411(a)(11)(A).

Section 417(e)(3)(B) defines the term “applicable mortality table” as the
mortality table specified for the plan year under § 430(h)(3)(A) (without regard to
§ 430(h)(3)(C) or (D)), modified as appropriate by the Secretary.

Rev. Rul. 2007-67, 2007-2 CB 1047, provides that, except as otherwise
stated in future guidance, the applicable mortality table under § 417(e)(3) for
2008 is based on a fixed blend of 50% of the static male combined mortality rates
and 50% of the static female combined mortality rates promulgated under
§ 1.430(h)(3)-1(c)(3) of the proposed regulations (which have since been issued
as final regulations). The applicable mortality table for purposes of § 417(e)(3) is
not a generational table. Rev. Rul. 2007-67 also provides that the applicable
mortality table for a given year applies to distributions with annuity starting dates
that occur during stability periods that begin during that calendar year. Rev. Rul.
2007-67 further states that the § 417(e)(3) applicable mortality table for each
subsequent year will be published in future guidance and, except as provided in
that future guidance, will be determined from the § 430(h)(3)(A) tables on the

4
same basis as the applicable mortality table for 2008. Notice 2008-85 set forth
the § 417(e)(3) applicable mortality tables for distributions with annuity starting
dates that occur during stability periods beginning during calendar years 2009
through 2013. Notice 2013-49 set forth the § 417(e)(3) applicable mortality
tables for distributions with annuity starting dates that occur during stability
periods beginning during calendar years 2014 and 2015. Notice 2015-53 set
forth the § 417(e)(3) applicable mortality tables for distributions with annuity
starting dates that occur during stability periods beginning during calendar year
2016.

STATIC MORTALITY TABLES FOR 2017

This notice sets forth the mortality tables for minimum funding and present
value requirements for 2017.

The static mortality tables that apply under § 430(h)(3)(A) for valuation
dates occurring during 2017 are set forth in the appendix to this notice. The
mortality rates in these tables have been developed from the base mortality
rates, projection factors, and weighting factors set forth in § 1.430(h)(3)-1(d),
using the blending techniques described in the preamble to those regulations.

The static mortality tables that apply under § 417(e)(3) for distributions
with annuity starting dates occurring during stability periods beginning in 2017
are set forth in the appendix to this notice in the column labeled “Unisex.” These
tables were derived from the tables used for § 430(h)(3)(A) following the
procedures set forth in Rev. Rul. 2007-67.

Drafting Information

The principal authors of this notice are Michael Brewer and Linda S. F.
Marshall of the Office of the Associate Chief Counsel (Tax Exempt and
Government Entities). For further information regarding this notice, contact
Michael Brewer or Linda Marshall at (202) 317-6700 (not a toll-free number).

5
APPENDIX

Mortality tables for
valuation dates occurring during 2017 and
distributions subject to § 417(e)(3) with annuity starting dates occurring
during stability periods beginning in 2017

Age
MALE MALE MALE FEMALE FEMALE FEMALE
UNISEX
2017
Non-
Annuitant
Table
2017
Annuitant
Table
2017
Optional
Combined
Table
for Small
Plans
2017
Non-
Annuitant
Table
2017
Annuitant
Table
2017
Optional
Combined
Table
for Small
Plans
2017
Table for
Distributions
Subject to
§ 417(e)(3)
1 0.000334 0.000334 0.000334 0.000299 0.000299 0.000299 0.000317
2 0.000225 0.000225 0.000225 0.000195 0.000195 0.000195 0.000210
3 0.000187 0.000187 0.000187 0.000146 0.000146 0.000146 0.000167
4 0.000146 0.000146 0.000146 0.000109 0.000109 0.000109 0.000128
5 0.000134 0.000134 0.000134 0.000098 0.000098 0.000098 0.000116
6 0.000128 0.000128 0.000128 0.000092 0.000092 0.000092 0.000110
7 0.000123 0.000123 0.000123 0.000086 0.000086 0.000086 0.000105
8 0.000113 0.000113 0.000113 0.000077 0.000077 0.000077 0.000095
9 0.000109 0.000109 0.000109 0.000073 0.000073 0.000073 0.000091
10 0.000111 0.000111 0.000111 0.000074 0.000074 0.000074 0.000093
11 0.000115 0.000115 0.000115 0.000075 0.000075 0.000075 0.000095
12 0.000119 0.000119 0.000119 0.000078 0.000078 0.000078 0.000099
13 0.000126 0.000126 0.000126 0.000081 0.000081 0.000081 0.000104
14 0.000137 0.000137 0.000137 0.000091 0.000091 0.000091 0.000114
15 0.000146 0.000146 0.000146 0.000101 0.000101 0.000101 0.000124
16 0.000154 0.000154 0.000154 0.000109 0.000109 0.000109 0.000132
17 0.000163 0.000163 0.000163 0.000117 0.000117 0.000117 0.000140
18 0.000171 0.000171 0.000171 0.000120 0.000120 0.000120 0.000146
19 0.000179 0.000179 0.000179 0.000117 0.000117 0.000117 0.000148
20 0.000187 0.000187 0.000187 0.000114 0.000114 0.000114 0.000151
21 0.000200 0.000200 0.000200 0.000111 0.000111 0.000111 0.000156
22 0.000211 0.000211 0.000211 0.000112 0.000112 0.000112 0.000162
23 0.000230 0.000230 0.000230 0.000118 0.000118 0.000118 0.000174
24 0.000247 0.000247 0.000247 0.000124 0.000124 0.000124 0.000186
25 0.000273 0.000273 0.000273 0.000132 0.000132 0.000132 0.000203
26 0.000312 0.000312 0.000312 0.000145 0.000145 0.000145 0.000229
27 0.000325 0.000325 0.000325 0.000152 0.000152 0.000152 0.000239
28 0.000335 0.000335 0.000335 0.000160 0.000160 0.000160 0.000248
29 0.000351 0.000351 0.000351 0.000169 0.000169 0.000169 0.000260
30 0.000378 0.000378 0.000378 0.000191 0.000191 0.000191 0.000285
31 0.000425 0.000425 0.000425 0.000237 0.000237 0.000237 0.000331
32 0.000479 0.000479 0.000479 0.000271 0.000271 0.000271 0.000375
33 0.000537 0.000537 0.000537 0.000295 0.000295 0.000295 0.000416
34 0.000598 0.000598 0.000598 0.000315 0.000315 0.000315 0.000457
35 0.000658 0.000658 0.000658 0.000333 0.000333 0.000333 0.000496
36 0.000716 0.000716 0.000716 0.000349 0.000349 0.000349 0.000533

6
Age
MALE MALE MALE FEMALE FEMALE FEMALE
UNISEX
2017
Non-
Annuitant
Table
2017
Annuitant
Table
2017
Optional
Combined
Table
for Small
Plans
2017
Non-
Annuitant
Table
2017
Annuitant
Table
2017
Optional
Combined
Table
for Small
Plans
2017
Table for
Distributions
Subject to
§ 417(e)(3)
37 0.000770 0.000770 0.000770 0.000364 0.000364 0.000364 0.000567
38 0.000795 0.000795 0.000795 0.000381 0.000381 0.000381 0.000588
39 0.000815 0.000815 0.000815 0.000400 0.000400 0.000400 0.000608
40 0.000834 0.000834 0.000834 0.000435 0.000435 0.000435 0.000635
41 0.000855 0.000882 0.000855 0.000477 0.000477 0.000477 0.000666
42 0.000881 0.000977 0.000882 0.000525 0.000525 0.000525 0.000704
43 0.000912 0.001120 0.000915 0.000578 0.000578 0.000578 0.000747
44 0.000949 0.001311 0.000956 0.000634 0.000634 0.000634 0.000795
45 0.000992 0.001550 0.001005 0.000671 0.000678 0.000671 0.000838
46 0.001029 0.001836 0.001051 0.000707 0.000766 0.000708 0.000880
47 0.001069 0.002170 0.001104 0.000741 0.000897 0.000745 0.000925
48 0.001110 0.002552 0.001162 0.000802 0.001072 0.000811 0.000987
49 0.001153 0.002981 0.001227 0.000867 0.001291 0.000885 0.001056
50 0.001196 0.003458 0.001298 0.000968 0.001553 0.000997 0.001148
51 0.001238 0.003488 0.001350 0.001083 0.001670 0.001117 0.001234
52 0.001282 0.003475 0.001432 0.001253 0.001887 0.001300 0.001366
53 0.001373 0.003523 0.001578 0.001451 0.002167 0.001519 0.001549
54 0.001473 0.003570 0.001743 0.001683 0.002506 0.001781 0.001762
55 0.001639 0.003726 0.002070 0.001953 0.002912 0.002135 0.002103
56 0.001849 0.003960 0.002519 0.002273 0.003397 0.002594 0.002557
57 0.002096 0.004270 0.002918 0.002564 0.003888 0.003015 0.002967
58 0.002385 0.004682 0.003396 0.002803 0.004363 0.003408 0.003402
59 0.002634 0.005082 0.003855 0.003066 0.004904 0.003867 0.003861
60 0.002911 0.005565 0.004406 0.003348 0.005497 0.004413 0.004410
61 0.003318 0.006263 0.005185 0.003650 0.006135 0.005093 0.005139
62 0.003649 0.006899 0.005957 0.003966 0.006817 0.005847 0.005902
63 0.004122 0.007807 0.007034 0.004292 0.007545 0.006738 0.006886
64 0.004476 0.008639 0.007954 0.004624 0.008330 0.007605 0.007780
65 0.004823 0.009567 0.009013 0.004958 0.009189 0.008576 0.008795
66 0.005328 0.010861 0.010485 0.005287 0.010119 0.009693 0.010089
67 0.005656 0.012024 0.011712 0.005607 0.011119 0.010770 0.011241
68 0.005776 0.012975 0.012715 0.005916 0.012210 0.011910 0.012313
69 0.006057 0.014333 0.014096 0.006209 0.013435 0.013165 0.013631
70 0.006117 0.015450 0.015207 0.006485 0.014844 0.014561 0.014884
71 0.006925 0.017095 0.016857 0.007072 0.016080 0.015805 0.016331
72 0.008542 0.018981 0.018764 0.008246 0.017886 0.017625 0.018195
73 0.010967 0.021143 0.020958 0.010007 0.019406 0.019183 0.020071
74 0.014200 0.023587 0.023441 0.012354 0.021508 0.021322 0.022382
75 0.018241 0.026973 0.026859 0.015288 0.023178 0.023044 0.024952
76 0.023091 0.030063 0.029990 0.018809 0.025537 0.025445 0.027718
77 0.028749 0.034264 0.034221 0.022917 0.028814 0.028754 0.031488
78 0.035215 0.039012 0.038992 0.027612 0.031762 0.031734 0.035363
79 0.042490 0.044421 0.044416 0.032894 0.035067 0.035060 0.039738

7
Age
MALE MALE MALE FEMALE FEMALE FEMALE
UNISEX
2017
Non-
Annuitant
Table
2017
Annuitant
Table
2017
Optional
Combined
Table
for Small
Plans
2017
Non-
Annuitant
Table
2017
Annuitant
Table
2017
Optional
Combined
Table
for Small
Plans
2017
Table for
Distributions
Subject to
§ 417(e)(3)
80 0.050573 0.050573 0.050573 0.038761 0.038761 0.038761 0.044667
81 0.057989 0.057989 0.057989 0.042902 0.042902 0.042902 0.050446
82 0.066374 0.066374 0.066374 0.047560 0.047560 0.047560 0.056967
83 0.073988 0.073988 0.073988 0.052808 0.052808 0.052808 0.063398
84 0.084299 0.084299 0.084299 0.058732 0.058732 0.058732 0.071516
85 0.093574 0.093574 0.093574 0.067030 0.067030 0.067030 0.080302
86 0.103746 0.103746 0.103746 0.076586 0.076586 0.076586 0.090166
87 0.117747 0.117747 0.117747 0.087502 0.087502 0.087502 0.102625
88 0.133521 0.133521 0.133521 0.097462 0.097462 0.097462 0.115492
89 0.147557 0.147557 0.147557 0.110864 0.110864 0.110864 0.129211
90 0.166587 0.166587 0.166587 0.122521 0.122521 0.122521 0.144554
91 0.181448 0.181448 0.181448 0.134544 0.134544 0.134544 0.157996
92 0.201536 0.201536 0.201536 0.146653 0.146653 0.146653 0.174095
93 0.217406 0.217406 0.217406 0.162438 0.162438 0.162438 0.189922
94 0.233252 0.233252 0.233252 0.174224 0.174224 0.174224 0.203738
95 0.254942 0.254942 0.254942 0.185384 0.185384 0.185384 0.220163
96 0.270586 0.270586 0.270586 0.195744 0.195744 0.195744 0.233165
97 0.285785 0.285785 0.285785 0.210133 0.210133 0.210133 0.247959
98 0.307815 0.307815 0.307815 0.218634 0.218634 0.218634 0.263225
99 0.322373 0.322373 0.322373 0.225897 0.225897 0.225897 0.274135
100 0.336381 0.336381 0.336381 0.231833 0.231833 0.231833 0.284107
101 0.358628 0.358628 0.358628 0.244834 0.244834 0.244834 0.301731
102 0.371685 0.371685 0.371685 0.254498 0.254498 0.254498 0.313092
103 0.383040 0.383040 0.383040 0.266044 0.266044 0.266044 0.324542
104 0.392003 0.392003 0.392003 0.279055 0.279055 0.279055 0.335529
105 0.397886 0.397886 0.397886 0.293116 0.293116 0.293116 0.345501
106 0.400000 0.400000 0.400000 0.307811 0.307811 0.307811 0.353906
107 0.400000 0.400000 0.400000 0.322725 0.322725 0.322725 0.361363
108 0.400000 0.400000 0.400000 0.337441 0.337441 0.337441 0.368721
109 0.400000 0.400000 0.400000 0.351544 0.351544 0.351544 0.375772
110 0.400000 0.400000 0.400000 0.364617 0.364617 0.364617 0.382309
111 0.400000 0.400000 0.400000 0.376246 0.376246 0.376246 0.388123
112 0.400000 0.400000 0.400000 0.386015 0.386015 0.386015 0.393008
113 0.400000 0.400000 0.400000 0.393507 0.393507 0.393507 0.396754
114 0.400000 0.400000 0.400000 0.398308 0.398308 0.398308 0.399154
115 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000
116 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000
117 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000
118 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000
119 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000 0.400000
120 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000